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Here are some breathless headlines from various news outlets on Thursday night:
The market seems to have moved from last night’s unseemly panic to a state of resigned disappointment. Apples’s shares were briefly down 8 per cent in the late trading Tuesday, after it released its June quarter earnings report. On Wednesday afternoon the shares closed down just 4 per cent.
Swatch's bearer shares once traded at an 18 per cent premium to its registered shares. Having fallen for two years, the premium may be about to widen again
We’ve talked about equity collars before in stock-for-stock M&A transactions. The idea is that the selling shareholders who are worried about downwards movements in the stock price of the acquiror, get an upward adjustment in the exchange ratio if the acquiror’s stock price falls. Such collars are typically symmetrical so if the acquiror’s stock price rises, the exchange ratio is then adjusted downward.
The Coty/P&G Beauty brands combination from last week provides a rare example of a collar on debt. Coty is combining with the P&G businesses in a so-called Reverse Morris Trust. P&G will separate the unit and then combine it with Coty so that P&G shareholders will own 52 per cent of the new Coty. That proportion is crucial. Because P&G shareholders maintain control, the transaction is tax-free at the corporate and shareholder level.